Hester Company budgets on an annual basis for its fiscal year. The following beginning and ending inventory levels (in units) are planned for the fiscal year of July 1, 2010 through June 30, 2011.

Three (3) units of raw material are needed to produce each unit of finished product
1. [CMA Adapted] If Hester Company plans to sell 500,000 units during the 2010–2011 fiscal year, the number of units it would have to manufacture during the year would be?
2. [CMA Adapted] If 450,000 finished units were to be manufactured during the 2010–2011 fiscal year by Hester Company, the units of raw material needed to be purchased wouldbe?

Transcribed Image Text:

1-Jul-10 30-Jun-11 40,000 10,000 8,000 Finished goods30,000 000 Raw material Work in process 8,000